The total costs of corporate borrowing in the loan market : don't ignore the fees


Berg, Tobias ; Saunders, Anthony ; Steffen, Sascha


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URL: https://ub-madoc.bib.uni-mannheim.de/40796
URN: urn:nbn:de:bsz:180-madoc-407967
Document Type: Working paper
Year of publication: 2016
The title of a journal, publication series: ZEW Discussion Papers
Volume: 16-017
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Abstract: More than 80% of US syndicated loans contain at least one fee type and contracts typically specify a menu of spread and different types of fees. We test the predictions of existing theories about the main purposes of fees and provide supporting evidence that: (1) fees are used to price options embedded in loan contracts such as the draw-down option for credit lines and the cancellation option in term loans; and (2) fees are used to screen borrowers about the likelihood of exercising these options. We also propose a new total-cost-of-borrowing measure that includes various fees charged by lenders.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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Berg, Tobias ; Saunders, Anthony ; Steffen, Sascha (2016) The total costs of corporate borrowing in the loan market : don't ignore the fees. Open Access ZEW Discussion Papers Mannheim 16-017 [Working paper]
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